Verified answer

ROTFL.

The goal of withholding is to pay your tax bill, nothing more. If you want a larger refund, fine, change your W-4 and have your employer withhold $20 extra every 2 weeks. Then you can have a refund that is $520 larger.

Me, I'd rather have the money now and break even.

There's no shame in not understanding the thing that is one of the most complicated tasks the average person ever has to do. The fact that you're asking this question and trying to understand means you're already ahead of most people.

A tax refund is simply the IRS giving back your money because you paid more than you actually owed.

Imagine walking into Wal-Mart and buying a $15 item, you hand the cashier a $20 bill they give you $5 back. Tax refunds are the same thing, if your tax liability for the year was $1000 but you paid $1200 then you get the extra $200 back.

Tax liability is simply the amount of money the IRS keeps when everything is sorted out. Kind of like how the price of an item is $5, you can pay with exact change and get no refund or pay with a $100 bill and get $95 refund but either way the item costs $5.

Earning more money means you'll owe more taxes, but it also usually means your employer withholds more taxes from your paycheck. The size of your refund could be larger or smaller. It depends whether the extra withholding is more or less than the extra tax owed.

So imagine you go back to Wal-Mart the next day and purchase an item for $47. The fact that you got $5 change yesterday doesn't matter at this point. You could hand the cashier a $50 bill and get a $3 refund (smaller than yesterday) or hand them a $100 bill and get a $53 refund (larger than yesterday).

Either way you paid more because the item cost more, just like you pay more taxes when you earn more money but your refund amount could get bigger or smaller.

You are right, you don't understand how tax returns work. Do you think your "tax return" as you put it is like an ATM, or maybe a casino? That spits out money once a year? Every paycheck, your employer withholds a certain amount of taxes from your pay and sends it to the IRS. At the end of the year, you file your tax return. If the money you had withheld is more than your taxes owed you get a refund. If not, you pay extra. The more you have withheld, the higher your refund. It's not a f*cking welfare program for crying out loud.

Not how it works. A refund is what you had withheld minus what your actual tax liability is. It's what you overpaid. It's your change.

You fill out a W4 which dictates how much they withhold from your pay. The more you make, the more you owe. So your employer withholds for the year and say they withhold $4000 in federal tax. Based on your income for the year when you do your tax return, you really owed $2495. Your refund is $1505, the difference between what you paid for the year ($4000) and what you actually owe ($2495). It's your change.

The NEXT year, you also have $4000 withheld, but you make MORE money and actually owed $3390. Your refund is now only $610.

If your refund is small, it's because you got all the money in your checks. You get the same amount either way, it's just a matter of WHEN you get it. Smart people prefer it in their checks.

Not if you set up your withholding properly. A tax refund is nothing more than change back for an overpayment. If you fill out your W-4 properly you should be fairly close to even money at tax time.

I make around $85k per year and typically pay a few hundred when I file. I don't like lending money to the government at 0% interest so that suits me just fine.

Only when you would choose to have MORE FIT withheld out of your gross wages for each pay period during the 2013 tax year to be reported as a TAX CREDIT amount in the Box 2 of your W-2 form during the 2014 tax filing season and entered on the correct line of your 2013 1040 FIT return as a TAX CREDIT amount and a possible REFUND amount when that amount would be MORE than your FIT liability would be at that time during the 2014 tax filing season.

Hope that you find the above enclosed information useful. 02/27/2014

if you are educating yourself, there is a publication 17 at www.irs.gov which will spell it all out for you very well

and now to your complaint-- if you make more money that means that you climb up the ladder of the tax brackets and will have more income tax to pay

and it is true that the more you make the more they withhold from your pay which in the end would probably result in a refund very comparable to what you got before--just not in dollars, but % of your income

this might not make sense to you but take one year and compare with the other and see how they compare as to how much was actually owed(and refunded)

Income tax returns are due to you paying too much into taxes. It's better to overpay than to underpay and have the irs knocking on your door. Getting a bigger tax return isn't considered good though due to the potential use it could have been used for due to inflation. It goes back to the analogy of putting your money under a mattress

The more money you make, the more you get taxed. The government only refunds you money when you have paid more than you should have based on your income and expenses that are deductible. Generally, if you have higher deductible expenses = more refund. Simple as that.

The more money you make, the higher percentage of that income you pay toward taxes. Your thinking is backwards. Generally, the more money you make, the LESS your refund.